3. DESARROLLO DE CAPÍTULOS
3.1. Nociones generales sobre la prueba
3.1.2 Legalidad de la prueba
36
The rate of construction work in Nigeria since the early 1950's has been phenomenal. Residential buildings have taken up the largest share of the construction work. As Professor Aboyade noted, ‘'within the construction itself, the largest component comes from resid©ntj-Al V=> wildings
to tin g c\Voout <oO o £ c^or\ s t r u c t ! © a 1
activity, c* r»dl about thirty per cent of the gross capital formation".
in flU*
Although this fell in the following years, JLii; still constituted more than 25$, as shown in Table 2.4 below. Within the decade of 1957-66 itself the amount spent on building (and mostly residential building) grew from
£N30.7 million to £N52, an increase of about
6
.6
$ per annum. It has been asserted and perhaps without much exaggeration that a study of construction industry in Nigeria is a study of half the whole field of fixed capital accumulation in this country. The statement can be recast that a study of aggregative demand for cement in Nigeria is a study of the development of construction industry, from the use of mud and burnt bricks to that of concrete.Building continues to dominate the construction industry; nor is it building of all sorts, it is the construction of residential houses.
While we are not concerned here about efficiency in resource use, it is pertinent to point out that this has a far-reaching effect on the price elasticity of demand for cement. It is generally believed that price elasticity for cement is low both in the very short-run and even in the fairly long-run. One reason why cement is price inelastic is
1 . 0 . Aboyade, Foundations of African Economy. New York, Praeger, p.
1 2 1
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-Table 2.4
Construction Sector and idle Gross Capital Formation 1957 - 1966
Year
Building and Civil Engineering Total Gross Fixed Capital Formation
Building &
Civil
Engineering as a $ of GFCF Building
£'m
Civil
£ ’m
Total
£'m
1957 30.7 23.1 53.8 99.3 54.2
1958 35.6 23.6 59.2
109.2
54.21959 44.8
29.0
73.8122.8
60.11960
44.7 27.6 72.3 129.156.0
1961
42.8
27.1 69.9 152.5 45.81962 46.8 29.6
76.4 159.8 47.81963 47.6 33.0 80.6 177.8 45.3
1964
48.2
31.1 79.3 195.0 40.71965
50.6
42.3 92.9 234.1 39.71966
52.046.6 98.6
242.6 40.6Source: Federal Office of Statistics: Economic Indicators.
Vol. 5 , No. 5, May 1969.
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not
that engineers are^always committed to change technical designs within a short time^so that a small reduction in the price of cement will not induce any change in the specification of the design and raw materials already drawn up. There is also inertia on the part of engineers in altering the customary construction methods.
To what extent is the Nigerian construction industry affected by these factors? The fact that about 5Qfi of the construction work is not awarded on contract to contractors and engineers means that the
influence of these factors are considerably minimised. A difference of one pound per ton can alter the quantity purchased by individuals who prefer to employ technicians and labour and to supply them with materials. In this case, the cement content in any piece of work can be influenced by changes in .price of cement. Sand, stone and burnt
A
bricks are therefore effective substitutes even in the Western part of the country where the h i p e s t proportion of construction work has been going on since the past two decades. In some cases, cement is used f o r flooring and plastering of the wall. In some, it is used for the foundation of the building; and in yet another group^cement is not used at all. Under these circumstances, cement could be price elastic.
Apart from the level of construction work in the country, the level of price of cement can influence the level of consumption of cement. But we shall expect a very close positive association between cement
consumption and construction activity.
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-Another important factor influencing cement consumption is cement inter-industry relationship. It is generally agreed that cement has a weak forward linkage. Since the past few years, asbestos, water
producer
pipes and other pre>*» are being manufactured in the country. These products have increased the level of cement consumption, though the influence has not been considerable. The quantity taken up by the leading Asbestos Cement Product has been 15,000 tons on average between
1965
and1968
, and there are only a few of them.It is generally claimed that there is a close association between per capita income and consumption of cement. With our paucity of data, it is difficult to make a categorical statement; both figures on
population and national income are rough. Reliable inferences are therefore difficult to obtain. This drawback of lack of reliable
population figures is noted by participants of the sub-regional meeting on Economic Cooperation in West Africa
. 1
Table 2.5 gives the series of per capita consumption of cement and per capita income between4
1950-66. These series give a coefficient of determination of less than2
$. This is an indication of absence of association. Though as mentioned above much importance cannot be attached to this result.The most populous part of the country though not in terms of population
1. United Nations. Economic and Social Council, Economic Commission for Africa (E/C14/INR/117): op.cit., p. 39.
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Table 2.5
Nigeria: Per Capita Consumption of Cement and Per Capita Income^
Tear Per Capita Consumption in lbs
Per Capita Income in £N
1950
11.2 0 20.60
1951 17.22 21.69
1952 13.44 22.09
1953 17.92
22.10
1954 22.40
23.22
1955 24.64 23.32
1956 26.88 22.25
1957
29.12
23.671958 26.88 24.75
1959 33.60 25.89
1960
40.3228.50
1961 40.32 27.80
1962 38.08
28.271963
38.08
29.741964 38.08 29.64
1965 49.28 30.35
1966
49.28 30.23Sources: Federal Office of Statistics: Economic Indicators.
Vol. 5> No. 5, Nay, 1969- Lagos, Nigeria. 1
1
.1952
and1963
census figures are synthesized to obtain the rough estimates of population figures,1948
-1966
.See Olusanya, P.0. Social Economic Aspects of fiural Urban Migration in Western Nigeria. Appendix B.
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-density has been the least cement consuming area. The whole of six northern states has over half of the country's population, yet they consume just about 20^ of the aggregate cement consumption.^ The high level of cement consumption in the West is influenced by culture,
taste as well as economic prosperity
. 1 2
It is doubtful whether increase per capita per se can go a long way to explain increasing rate ofdemand for cement. Other explanatory variables have to be looked for.
In sum, while there are many factors that influence the consump
tion of cement and therefore the demand, the most important of these factors is the state of construction activity. It mCWj be incorrect
CK
to state^that cement will not be responsive to price as in the
developed countries. The conditions existing in those countries are either non-existent or passive in many developing countries. In addition, substitutes such as mud, burnt bricks, etc. which are ineffective substitutes in developed countries are effective in Nigeria. With increasing efficiency in the industry and consequent
lowering of prices, there will be a great stimulation in the consumption of cement.